Ministry of Finance
West Bengal has performed well in social sector; however, High Debt to GSDP ratio and Low Base of Capital Expenditure matter of concern
The Fifteenth Finance Commission of the Government of India is visiting the state of West Bengal from 16th to 18th July 2018. The Commission will have meetings with Chief Minister, Ministers and other officials of the state. Detailed presentations will be made on the finances of the State Government. On 17th July, before the formal presentations by the State govt officials, Commission led by Chairman Shri N.K. Singh will make a courtesy call on CM Ms. Mamata Banerjee. Commission will also visit IT Park in New Town, Kolkata, Madhyamgram Municipality and Kemia Khamarpara Gram Panchayat to understand their working and related issues. Ahead of the visit, Commission understood various aspects of its finances from Accountant General of West Bengal in New Delhi.
In the memorandum submitted to the Commission, West Bengal has mentioned numerous achievements in socio-economic areas. Government has launched numerous schemes for Social Sector development. State has achieved remarkable improvement in Institutional Deliveries from 65% in 2010 to 96% in 2018. MMR and IMR of West Bengal is considerably better than National Average. Total Fertility Rate in the state is 1.6 which is lowest in India. Total 12 states have achieved the replacement level of fertility . West Bengal stands 1st in terms of enrolment of students and disbursement of scholarships. State has been awarded Krishi Karman award 5 times in a row showing Exceptional Production in Pulses, Rice and Oilseed. West Bengal is ranked 10th amongst the achievers in Ease of Doing Business rankings released recently. Statistical data related to GSDP and related presentations made to the Finance Commission were based on the constant prices of 2004-05. Recent discussion between West Bengal govt and CSSO would make available recent data in due course of time.
Legacy Issues related to High Debt of State Govt. need restructuring in a multipronged manner
However, the State faces numerous challenges in its developmental stride. The fiscal picture in West Bengal is characterised by a high Debt-GSDP ratio and a low own tax revenue-GSDP ratio. West Bengal has consistently had the high outstanding debt over the period FY 2000-01 to 2017-18. The present government has contracted high debt from the previous govt. which has put onerous burden for servicing debt liability on it. It has greatly circumscribed other developmental expenditure. Restructuring of legacy debt is structural issue which would need multipronged and coherent action spread over a longer period. West Bengal’s low ratio of development expenditure to GSDP and Capital Outlay to GSDP need careful consideration. On the brighter side, Social Sector Expenditure to GSDP has been higher than the all state average.
As per “Swachh Survekshan 2018” conducted by Ministry of Housing & Urban Affairs, GOI, West Bengal is home to 18 of the 25 dirtiest cities in the country. With regard to the State’s commitment towards SDG 1, still 19.98% of the total population is still below the Poverty line which is not comfortable considering the state has second highest population density after Bihar. ATC losses are showing a declining trend though it is much above the permissible levels. State also needs special consideration due to International Border with Bangladesh, Bhutan and Nepal.
West Bengal is the fifth state to be visited by 15th Finance Commission from 16th to 18th July 2018
15th Finance Commission till now has made significant progress in understanding the needs of Union government and various state governments through numerous meetings and state visits. West Bengal is the fifth state to be visited by the Commission followed by Gujarat and Jharkhand. Commission hopes to gain an in-depth understanding of the recent developments and future possibilities of economic growth and development of West Bengal during its interactions and meetings with the state govt. The Commission led by the Chairman Shri N.K.Singh, Members – Shri Shaktikanta Das, Dr. Anoop Singh, Dr. Ashok Lahiri, Dr. Ramesh Chand and Secretary Shri Arvind Mehta along with other officials will also meet leaders of various political parties, Representatives of Trade and Industry. There will also be an interactive session with Urban Local Bodies and Panchayati Raj Institutions.
DSM/RM/AM